May a shareholder compel a co-op to replace terrace tiles with the same type of tile after the co-op has repaired the terrace? The court in Robert Fleisig v. 75 East End Owners Inc. answered this question in the negative by holding that the co-op could install pavers in place of quarry tiles.
This was an action sounding in breach of contract brought by the proprietary lessees of a co-op apartment located at 75 East End Avenue in Manhattan against the cooperative corporation. The plaintiffs alleged that the co-op had breached the lease by making changes to the apartment terrace.
The affidavit of plaintiff Robert Fleisig in support of the motion for summary judgment indicated that Fleisig objected to the alteration of the terrace because it involved replacing the quarry tile surface with paver, which he said had substantially diminished his ability to use and enjoy the terrace. He also believed that the manner in which some of the terrace rails were replaced had caused the rails to be loose and dangerous.
Fleisig submitted the affidavit of an engineer who inspected the terrace. The engineer stated that the concrete pavers were unstable at several locations and that the concrete was fading at unequal rates. He opined that the newly installed pavers could not be considered equal to a quarry tile terrace; that the quarry tile system was considered more expensive; and that the waterproofing system installed on the terrace could have and should have been quarry tile. While Fleisig’s motion papers complained of the workmanship regarding the installation of the pavers and the replacement of some rails, the complaint essentially alleged that the co-op had breached the contract by altering their terrace.
In support of the cross-motion to dismiss, the court said that the co-op demonstrated that the complaint failed to state a cause of action. As was pointed out by the co-op, while paragraph 7 of the proprietary lease provided that the lessee shall have the exclusive use of the terrace, and shall keep the terrace clean and free from snow and ice and shall maintain screens and drain boxes in good condition, the lessor was required by paragraph 2 to “keep in good repair all of the apartments, the sidewalk and courts surrounding the same” except those portions of the repair and maintenance stated to be the responsibility of the lessee under paragraph 18. The repairs listed in that paragraph did not include repairs to a terrace or balcony, but concerned primarily the interior of the apartment, and the fixtures and electrical wiring. While Fleisig argued that paragraph 2 did not specifically mention terraces, a reading of all of the relevant provisions of the proprietary lease led the court to the conclusion that it was the co-op, and not the lessee, which was responsible for repairing the terraces.
In the court’s view, the co-op had shown that the alteration of Fleisig’s terrace was performed in connection with a building wide exterior renovation project that was done at the direction of the co-op’s board of directors. An engineering firm was hired to inspect Fleisig’s terrace, and the inspecting engineer found that on April 5, 2001, the condition of the tiled surface had worsened since the preliminary inspection conducted in July 2000, with more quarry tile units exhibiting cracking and delamination. The firm recommended replacement of the entire terrace roofing system with the new system as specified for other terraces.
As a result of this report, the repairs to Fleisig’s terrace were added to the building renovation contract as a “change order,” and as indicated in the change order, the co-op contracted to perform on plaintiffs’ terrace the same work that was being done on other terraces in the building that needed repair.
The court said that there was no proof that the co-op’s actions were undertaken in bad faith or beyond the scope of its authority. The court stated that a court must defer to the co-op board’s determination when the board acts for the purposes of the cooperative and in good faith. Here, the board decided that Fleisig’s terrace needed to be repaired, and that the repair was to be accomplished by installation of concrete pavers, and not replacement of quarry tile. As was noted in another case in a similar situation where a co-op board had decided to replace the surface of terraces with concrete pavers rather than quarry tile, “There is no legal or contractual obligation on the part of the apartment corporation to replace quarry tile.”
Nor did Fleisig come forth with any support for his assertion that the co-op treated him in a discriminatory manner, because there were five other apartments that still had the original quarry tile. The co-op had indicated that the terraces of those apartments were not in need of repair or replacement, thus the original tiles remained. As for Fleisig’s argument that they have been discriminated against because the ground floor patio adjacent to the apartment of one of the board members had “decorative pavers,” the co-op stated that this patio had pavers, and not the quarry tile, which Fleisig argued that he was entitled to.
Additionally, the co-op had shown that the board decided that his area was unique and different from the terraces, and agreed to permit the shareholder to install pavers at his expense. Here, Fleisig had not even alleged bad faith or breach of fiduciary duty and there was no support in the record for such an allegation. Based upon the foregoing, the motion was denied and the cross-motion was granted.
Comment: This is one of a long line of co-op cases establishing the principle that where there are building repairs to be done by the co-op, the co-op determines the scope of such repairs, including the nature and extent, even if an affected shareholder prefers a different methodology or aesthetic.